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BNA Index Predicts Slower Wage Growth

Arlington, Va. (Feb. 18, 2010) — The pace of year-over-year wage increases in the private sector  likely will slow further in the coming months, according to the preliminary first quarter Wage Trend Indicator™ (WTI) released today by BNA, a leading publisher of specialized news and information.

The WTI fell to 97.09 (second quarter 1976 = 100) from 97.42 in the fourth quarter of 2009, as revised. The index has dropped steadily for the past two years.

“The latest index is pointing to further slowing in wage growth, but we’re not anticipating absolute declines in employees’ pay rates,” Kathryn Kobe, an economic consultant to BNA, said. “This economy remains so weak that there’s not a lot of room for people to demand wage increases,” Kobe said.

In the private sector as a whole, the rate of annual wage growth is expected to remain at or below the 1.4 percent posted in 2009, as measured by the Department of Labor. That was the smallest gain on record and down significantly from 2.4 percent in 2008.

Reflecting mixed economic conditions, three of the WTI’s seven components made negative contributions to the preliminary first quarter reading, while three components were positive, and one was neutral.

WTI graphic

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